United Nationsإدارة الشؤون الاقتصادية والاجتماعية التنمية المستدامة

Major Group: Business & Industry

BUSINESS ACTION FOR ENERGY
Working for Sustainable Solutions
A joint initiative for CSD 14 and 15 by the: Page 1 of 2
International Chamber of Commerce (ICC) www.iccwbo.org
World Business Council for Sustainable Development (WBCSD) www.wbcsd.org
World Energy Council (WEC) www.worldenergy.org
Business and Industry Statement
CSD14 Thematic Discussions, May 5, 2006
Thematic session: Investing in energy and industrial development: challenges and
opportunities
Compiled by Dr. Marc Darras.
Thank you Mr. Chairman,
The need for investment is huge at the international level for industrial development and access
to energy. We have already heard here the IEA evaluation for the energy system alone of US$
17 trillion through 2030. Business will transform these amounts in actual activities.
To develop these investments, we want to stress the need of enabling frameworks and
corresponding capacities, supported by good governance to provide an attractive and secure
investment environment. . This has been underlined by panellists and governments alike in the
session on industrial development Thursday morning. Required enabling framework conditions
include:
· transparent and stable economic and uniformly enforced regulatory systems based on
sound science, risk management and cost/benefit analysis;
· rule of law;
· protection of intellectual property;
· fair competition.
Finally concerted anti-corruption, solicitation and bribery efforts in the industry, remain a
priority. To promote investment notably in the energy sector, the business community sees a
strong need to eliminate acts of bribery and corruption, which is a shared responsibility.
Governments have an important role to play in assisting companies in the prevention of bribe
solicitation as well as in prosecuting offenders. Business and its various federations at the
international level are strongly involved in raising awareness and promoting good practices.
Investing is a two sided question: on the one hand financing attracts capital from different
sources, on the other hand to develop value creating activities which can meet a market. One
should always have these two aspect in mind like the two faces of the same coin.
BUSINESS ACTION FOR ENERGY
Working for Sustainable Solutions
A joint initiative for CSD 14 and 15 by the: Page 2 of 2
International Chamber of Commerce (ICC) www.iccwbo.org
World Business Council for Sustainable Development (WBCSD) www.wbcsd.org
World Energy Council (WEC) www.worldenergy.org
In the field of industrial and energy system development the size and the nature of the
projects to be developed vary from large infrastructure or heavy industry plants, to SME?s or
one person businesses. It is important to note here that large activities depend of a wide range of
smaller businesses for their success: support, maintenance, commercialization. Therefore,
organization of the financing should be adapted to the nature of the activity and to the risk.
One should underline that investment in energy projects is a long-term venture often over 30
years with investors facing considerable risks and challenges. Overall, investment conditions
must be appealing enough in the competition in between investment opportunities.
Furthermore financing should be adapted to the business type, and the financial potential of
the clients which could be either other industries, administrations or households. The creation
of value induced by the activities, notably in the field of energy or infrastructure should be
carefully assessed in order to evaluate the added value made available to these clients which will
be the basis of the payback for investment.
Access to energy is a specific field where action of national and local government , and
action of the business should be combined in partnership bringing together policies,
regulation, technical and economic capacities. These partnerships sho uld organize the pertinent
time scale of the investment and its financing, resources for access policies if needed,
adequation of the service to the needs, respecting the role and responsibilities of partners. To
ensure pertinence and participation of the concerned population, they should be involved in
these partnership.
Market approach ensure the best economic allocation of resources. As a last resort, subsidies
could enable access to energy for energy-poor populations, and for countries in transition to
more commercial merchant economies. When used, they must be transparent and be used with a
view to catalyse a sustainable activity. As such they should be consistent over time and include
definitive exit strategies, which will enable the long term economic viability of the activities
induced by this access to energy.
Innovative financing solutions that create synergies between sources of finance are also
necessary to encourage energy investment. In countries with limited capital, and specifically for
least developed countries, the role of Foreign Direct Investment should be complemented by
Inter-Governmental Organisation funds (World Bank, GEF, UN Agencies etc.), Official
Development Assistance (ODA), and local private funds. Through such innovative financing
solutions, project creation and implementation benefit from a variety of sources of funds, which
are mutually reinforcing, each fund being adapted to the type of investment and risks it covers.
Thank you.
BUSINESS ACTION FOR ENERGY
Working for Sustainable Solutions
A joint initiative for CSD 14 and 15 by the: Page 3 of 2
International Chamber of Commerce (ICC) www.iccwbo.org
World Business Council for Sustainable Development (WBCSD) www.wbcsd.org
World Energy Council (WEC) www.worldenergy.org